Over The Past 20 Years You Had To Own REITs, Oil, S&amp;P 500, Before Gold And Bonds

Robert Lenzner
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Here's a gigantic surprise courtesy of JP Morgan Asset Management, which sent me its record of the best asset classes for the last 20 years, 1991 through 2010.

Gold was not the leading asset class; rather the shiny stuff was 4th, behind REITs with a compound annual rate of return of 10.5%-- the only asset class in double digits. Then, came oil at second place with an 8% compound rate of return, and surprisingly the S&P 500 index, which compounded very nicely at 7.7%(especially due to some spectacular moves in the 1990s)

Coming in 4th was gold with a respectable 7.2% return, as the precious stuff didn't really start making its big run until 2002. Bonds came in 5th with a fairly decent 6.1% return-- followed by the emerging markets at 4.7%. No surprise that residential homes brought up the rear as this period included the real estate bubble collapsing.

You had big problems if you were NOT diversified properly, because the House of Morgan reckons the average American's portfolio only gained 2.6% a year over the period-- which was just a tad above the average rate of inflation-- 2.4%.

Scrutinize the chart again. Over 20 years you had to own REITs, oil, rhe S&P index BEFORE YOU owned gold and bonds.